Warren Buffett's Berkshire Hathaway stock blasted past many growth companies and the S&P 500 this year. And he can largely thank four stocks.
Berkshire Hathaway's current positions in six U.S.-traded holdings, including financial American Express, energy firms Occidental Petroleum and Chevron and consumer staple Kroger, added more than $1 billion in market gains — apiece — this year, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith. That's a big reason why the A class shares of Berkshire Hathaway are screaming. They're up more than 16% this year — topping more than 500,000 a share — even as the S&P 500 slips 7.2%.
All told, Berkshire Hathaway is now worth more than $740 billion. That ranks it as the sixth most valuable company in the S&P 500. It's worth more than either now-struggling tech stocks Nvidia and Meta Platforms. And Buffett's company is now just behind the value of Elon Musk's Tesla at $868 billion.
Investors in Berkshire Hathaway gained more than $90 billion in wealth this year so far. Everyone else? They're collectively down more than $4 trillion, says Wilshire Associate. How'd he do it?
Buffett's Comeback
Don't just write off Buffett's comeback as a lucky break. Berkshire Hathaway's outperformance is again reaching notable levels.
For the first time in months, Berkshire Hathaway's one-year performance is topping the S&P 500's. And not by a little. Shares are up more than 35%, blowing away the S&P 500's 9.7% gain in that time. And that's enough to double Berkshire Hathaway's value in five years, topping the roughly 80% rise of the S&P 500.
Some of Buffett's resurrection is due to a comeback in high-dividend paying stocks. But not all of it. The SPDR S&P Dividend ETF is down roughly 2% this year. Some of his picks needed to be strong enough, too, to counteract the massive $15.6 billion loss on Berkshire's position in Apple. Apple is Berkshire's largest position and it's down 9.9% this year.
So, what S&P 500 stocks is Buffett riding high on?
Betting Big On Amex
When it comes to Buffett's big winners, it's finally American Express' turn to pay off. Berkshire's giant 20% ownership position in the company generated the largest payoff of any Berkshire-owned stock this year, $3.5 billion.
Shares of American Express are up more than 13.9% this year. That's a much needed lift when the S&P 500 is down on the year. But the reason it's such a massive winner for Berkshire is the large size of the stake. Holding more than 151 million shares makes Buffett the top investor in the company. Buffett is a long-time holder of the financial services company, which posted more than 165% growth in adjusted profit per share in 2021. Profit is seen falling 3% in 2022, but jumping again by nearly 17% in 2023.
Digging Into S&P 500 Energy
Buffett, unlike many investors, never succumbed to the "ESG" backlash against S&P 500 energy stocks. And that's been a boon this year, too.
His stake in Chevron has grown in value by more than $1.6 billion this year. That's thanks to a robust 36% jump in the stock's price as investors clamor for dividends. Buffett owns more than 2% of the company, giving Berkshire Hathaway dibs on the powerful 3.6% yield.
Additionally, Buffett has been adding again to his position in Occidental Petroleum. His latest buy in March takes his position in the stock, which he dumped years ago before returning to it, to nearly 10% of shares outstanding. The value of his new position size of 91.2 million shares is up $2.6 billion, or 99%, in value this year.
Shopping For Staples Like Kroger
Grocery stores may not be as exciting as the metaverse, but that's the appeal to Buffett in this economy.
Berkshire Hathaway has now accumulated a nearly 17% stake in Ohio-based grocery giant Kroger. The value of his 122.8 million shares is up more than 22% this year, putting $1.3 billion of value into the portfolio. The stock's 1.5% dividend yield isn't much to brag about. But its stability is. Analysts think the company will make an adjusted $3.82 a share this fiscal year, up nearly 4% from last year. And profit is seen growing each of the following three years, too.
Absolutely, Buffett hit some lucky breaks. The amazingly fortunate 19% jump in his shares of video game maker Activision Blizzard comes to mind. He owned nearly 2% of the company ahead of the buyout by Microsoft, sending the value of his stake up $181 million this year.
But that's nothing next to his billion-dollar babies.
Berkshire Hathaway's Top Value Gainers This Year
Based on most recently disclosed positions of U.S.-listed stocks
| Company | Ticker | Stock % ch. YTD | Increase in value ($ billions) | Sector |
|---|---|---|---|---|
| American Express | 13.9% | $3.5 | Financials | |
| Occidental Petroleum | 99.1 | 2.6 | Energy | |
| Chevron | 36.5 | 1.6 | Energy | |
| Kroger | 22.9 | 1.3 | Consumer Staples | |
| Coca-Cola | 1.3 | 0.3 | Consumer Staples | |
| Activision Blizzard | 18.6 | 0.2 | Communication Services | |
| AbbVie | 16.8 | 0.07 | Health Care | |
| T-Mobile US | 11.3 | 0.07 | Communication Services | |
| Aon | 4.8 | 0.06 | Financials | |
| Verizon Communications | 0.8 | 0.06 | Communication Services |
